Housing CaseEssay Preview: Housing CaseReport this essayPurchasing a new home is costly but the benefits can possibly outweigh the sacrifices made to make such a large purchase. Principle 4, responding to incentives, plays a major role in making the decision to purchase a new home. Tax credits are available to new home owners, privacy, the ability to alter the home and expand as well as building equity within the home which makes it a more valuable asset.
There are several factors to consider in the decision making process, such as the market value of the location of the home, curb appeal, and community appeal. If for some reason a home owner needs to sell the home it has to be desirable to potential owners, meaning the house must look inviting from the street and be well maintained. Also, the other homes in the community must be attractive.
When consumers stop spending money it has a trickle effect. If businesses are not making money they can not spend money, causing fewer jobs and less income for families which eventually affects the hosing market because families can not purchase homes they can not afford, so the housing market adjusts. When the economy is poor the housing market is able to offer homes for less in an effort to sell houses that would remain vacant otherwise. This influences marginal benefits and marginal costs because selling a home for less is better than not selling a home at all. If a home is $100,000 during a time when the economy is strained, it can be sold for $70,000 with a tax credit to entice a buyer. Money is lost, but a profit is made.
The Tax Cuts And Jobs Act (TEC) cuts about $3 trillion over the next 30 years. But if the economy is strong, the tax cuts will keep the economy moving. If that happens, a trillion new dollars will be created every year. If the tax cuts stay below what is considered the ‘magic number’ and people are able to continue making in some cases as much as they please while still remaining healthy, the economy will continue to grow with real real growth on top of a sustainable employment rate and the private sector will continue to take interest from customers to produce a steady business environment and boost growth.
The House Tax Reform Committee has just passed “Housing Act 2030, which addresses the growing cost pressure on consumers to make even more, saving the federal government nearly $10 billion by the end of 2025, including $1 billion in federal, state and local subsidies and up to 50 more from federal and state, and up to $50 billion during a 40-year period, and ending under-utilization of existing infrastructure; $500 million in other programs for low-income families to save about $6 billion each year: increased loan relief for those on a mortgage with a large home, increased federal housing loans for young families, and more low paying businesses at the expense of large corporate and industrial companies that depend on affordable housing for their bottom line; and expanded tax-deductible home insurance to ensure that businesses on the low end of the income spectrum earn more. The bipartisan Committee voted to make the savings because the President is proposing significant capital gains tax rates, for example, to encourage the low income most responsible for housing.
In fact, the Congressional Budget Office projected that by 2040, $4 trillion of public investments would be made in housing, $2 trillion in tax revenues would be raised, and by 2060, all jobs would be creating income for low and middle income families:
Of course, the most important investments will be in economic growth. Those who make higher-quality, higher-cost mortgages or create better, middle and higher income housing will benefit. Those who make mortgage loans who spend more money creating new jobs and lower and middle income jobs will receive more from government and the American people as a result. Those who have jobs and make new, higher quality, better-paying jobs will benefit. Those who make higher quality, higher priced, better working jobs will benefit. In addition, in the same period, the economy will expand in a much-needed manner. A decade from now that the economy is stronger than many expected, millions of people will be able to return on the investment made in housing, investments in new infrastructure, investment in building new businesses, and investing in job creation and job growth. Those who help families and those who contribute to the nation’s economy will be spared from the pressures that might result from a low-income household’s